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Trade and technology

Friend-shoring critical mineral supply chains


Published 04 April 2023

Quietly and steadily, China has built up its dominance over critical minerals in the past two decades. As the world confronts climate change and brewing geopolitical tensions, the potential weaponization of such dependence is spurring the push to "friend-shore" critical mineral supply chains.

Critical minerals go beyond “rare earths”, constituting the key ingredients in a wide variety of high-end technologies that have become omnipresent in modern-day societies. The significance of these minerals has expanded in scope as nations work toward their green transition.

Over the last 20 years, China has become the leader in mining most and processing all major critical minerals. Given its rapid technological advancements and transition to clean energy sources, China’s demand for critical minerals soared. As a result, the Middle Kingdom exerts significant control over both upstream and downstream markets. In the long run, this dominance could impact innovation and impede global climate response.

In this study, Akhil Ramesh and Rob York of Pacific Forum map the supply chains of critical minerals, showing how China assumed a central role in harvesting and distributing them, and offer suggestions on how to diversify the industry. From the availability of critical minerals to the industrial capacity for processing in each economy, the authors conclude that Canada, Australia, and Chile present the most viable alternatives to re-shoring supply chains away from China in the Indo-Pacific region.

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Akhil Ramesh is a Senior Fellow at Pacific Forum where he conducts research on supply chains, East Asia, and topics at the intersection of security policy and trade policy in the broader Indo-Pacific region.

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Author

Rob York

Rob York is Director for Regional Affairs at Pacific Forum. He is responsible for editing Pacific Forum publications. Prior to joining Pacific Forum, Rob worked as a production editor at The South China Morning Post in Hong Kong.

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